Victoria's Secret & Co (VSCO, Financial), a renowned name in the retail-cyclical sector, has experienced a notable stock price change recently. Over the past week, the company's stock price has decreased by 2.86%, yet it has gained an impressive 13.98% over the last three months. Currently, the company's market capitalization stands at $1.9 billion with a stock price of $24.31. According to GuruFocus's valuation, the stock is significantly undervalued with a GF Value of $34.49, despite being considered a possible value trap three months ago.
Company Overview
Victoria's Secret & Co operates globally, offering a wide range of lingerie, pajamas, and beauty products. The company aims to provide a seamless shopping experience through its extensive online and physical store presence. As a single-segment entity, it focuses on delivering high-quality products and services to its customers worldwide.
Assessing Profitability
Victoria's Secret holds a moderate Profitability Rank of 5/10. The company's operating margin stands at 3.98%, which is better than 51.26% of its peers. Its Return on Equity (ROE) is an impressive 32.73%, surpassing 90.73% of competitors. Additionally, its Return on Assets (ROA) and Return on Invested Capital (ROIC) are 2.32% and 4.89% respectively, indicating efficient management of assets and investments. Despite these strong figures, the company has only been profitable for four out of the last ten years.
Growth Metrics
The company's Growth Rank is low at 1/10, reflecting very limited growth compared to its peers. However, it has a 3-Year Revenue Growth Rate per Share of 9.80%, which is better than 58.52% of its competitors. The 5-Year Revenue Growth Rate per Share shows a decline of 1.80%, yet it still outperforms 33.06% of its peers. Notably, the 3-Year EPS without NRI Growth Rate is 66.70%, significantly higher than 89.25% of competitors.
Major Stakeholders
Top holders of Victoria's Secret stock include PRIMECAP Management (Trades, Portfolio), holding 1,787,373 shares (2.28%), followed by Joel Greenblatt (Trades, Portfolio) with 443,706 shares (0.57%), and Chuck Royce (Trades, Portfolio) with 256,557 shares (0.33%). These significant investments reflect confidence in the company's market position and future potential.
Competitive Landscape
Victoria's Secret competes with other notable companies in the retail-cyclical sector. Guess? Inc (GES, Financial) has a market cap of $1.16 billion, Buckle Inc (BKE, Financial) is valued at $2.22 billion, and Chico's FAS Inc (CHS, Financial) stands at $937.041 million. These companies represent the competitive environment in which Victoria's Secret operates, each with unique strengths and market strategies.
Conclusion
Victoria's Secret & Co's recent stock performance, marked by a significant quarterly gain, highlights its resilience and potential for recovery. The company's strong profitability metrics and strategic market positioning suggest a promising outlook, despite its low growth rank. Investors should consider the current undervaluation as a potential opportunity, keeping in mind the historical caution suggested by its past GF Valuation. As the retail landscape evolves, Victoria's Secret appears well-prepared to maintain and expand its market presence.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
